Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Carbonates in Indonesia

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Executive Summary

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PROSPECTS

Health concerns lead consumers to shift away from carbonates

Consumer trends played a part in the declining popularity of carbonates. Increasingly, carbonates are perceived as unhealthy drinks, due to their high sugar content.

Manufacturers increasingly play in the affordable segment

One strategy applied by manufacturers of carbonates during 2017 was partnerships with retailers to offer price promotions. Carbonates, which were perceived as premium soft drinks, became more affordable to consumers, and thus managed to reach a wider consumer base.

Forecast period trends

Carbonates will continue to be perceived as unhealthy in the forecast period, due to their high sugar content. Therefore, many Indonesians are expected to continue to reduce their consumption in the forecast period, and they will turn to healthier soft drinks instead, including RTD green tea, functional bottled water and even sports drinks.

COMPETITIVE LANDSCAPE

Coca-Cola Indonesia continues to extend its lead

Carbonates is characterised by the dominance of multinational companies. Towards the end of the review period Coca-Cola Indonesia carried out aggressive efforts to revive consumers’ confidence, especially in its main carbonates brands, Coca-Cola, Sprite and Fanta, through advertisements via electronic media, event sponsorship and lucky draws.

Aje suffers a decline in share after the bounce-back of Coca-Cola

Entering the country only in 2011, Aje Indonesia quickly won the hearts of Indonesian consumers, and managed to affect Coca-Cola Indonesia’s share at the beginning of the review period through its low pricing strategy. Towards 2017, however, Aje’s share gradually declined.

A potential threat to growth

The dominance of Coca-Cola Indonesia in carbonates is expected to remain unshaken in the forecast period, thanks to its commitment to continuously expand its distribution network – especially across traditional channels – and to launch more affordable SKUs to cater to mass Indonesian consumers. A threat for the company may come from a proposal by DPR (Dewan Perwakilan Rakyat, or The People’s Representative Council) to impose an excise tax on carbonates in the country, as an attempt to increase the country’s income.

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